Business 101 - Or the basics we forget.

Last week my good friend had a less than fun experience with a high-grade Italian restaurant that's well known in my area of Melbourne, Australia. In fact, it was so unpleasant that said friend - who otherwise goes by the name of Dave - subsequently took himself and his 7 guests across the road to the restaurant's closest and most direct competitor. They ate there instead, had a lovely night, and the Italian restaurant missed out on an odd $500.

We've all got similar stories; of waiters with bad 'tudes making us feel somehow inferior to a guy who just takes food orders, or of rude sales reps that make us question why we're handing over our hard-earned dollars to an ungrateful, asshole company that surely has enough money already???

The life of a working-to-middle-class-Western consumer, ay. Those experiences never feel nice, and if you're anything like me, they soon etch themselves into your ever-expanding "Lifelong Blacklist of Places to Never Grace With My Presence... Ever Again".

In fact, most of the research out there suggests that there's a good chance you might be a lot like me - although probably less vindictive. The most telling nugget of insight comes from Lee Resources International Inc, who found that "91% of unhappy customers will not willingly do business" again with the unlucky firm that happened to piss them off. On top of this, research by the White House Office of Consumer Affairs reminds us that "news of bad customer service reaches more than twice as many ears as praise for a good service experience"(1). 

The customer experience is the next competitive battleground - Jerry Gregoire, CIO, Dell.

"But that's so obvious", you say, "Like everyone knows that if you treat 'em mean you'll lose the green..."

Right? It's super obvious. It's Business 101.
You know what else is obvious? The benefits of oral health... Some may even say that flossing and brushing could be considered Mouth Hygiene 101. But sadly, in 2016, the adult population is still battling with the surmounting issue of flossing daily.

So why did our old mate at this restaurant push 8 customers away? Why do firms, big and small, forget that we, the consumers, pay the bills? And why, for the love of God, can't I inspire myself to floss every time before brushing my teeth?!

I'm glad you asked. Buckle up, buckaroo's. 

The Limited Resources Game

All firms have one fundamental economic problem in common - a limited amount of resources and the resulting challenge of how to use these resources best.

The owner of a new cafe down the street and the CEO of a multinational logistics firm share the relative constraints of limited finance. Your local Triple X Adult store and massive media conglomerates like News Corp both must tackle the same issue of limited time - there's only so much painful, mindlessly degrading penetration you can get to consumers in a day, and also only so much porn you can sell.

What arises out of the limited resources game is a complex set of choices that any manager must make. A firm needs to be tended to in myriad aspects of funding, accounting, hiring, training, product-generation, marketing, promotion, digitalization, R&D, database management, restructuring, portfolio-diversifying... and the list goes on. It's not surprising, then, that somewhere in this mix the vitality of devoting at least some resources toward the firm's customer-service strategy is forgotten.

New firms starting up may not choose or feel the need to focus on service in getting their business up and running, while older firms suffer from bureaucratic restraints when trying to introduce new systems company-wide. Such a model shows that firms risk becoming trapped in a situation of poor service culture, which can eventually lead to competitive struggles further down the industry lifecycle stage. 

The best way to tackle this is to get in early and invest in your service offering - no matter your business, don't underestimate the power that memorable customer service and a quality experience offer can have right now and down the track.

Poor Facilitation

We all know that great service is important to business earnings, and many of us would like to think that we do offer great service. But firms that neglect to implement early on the necessary infrastructure to facilitate top-tier customer service don't exactly put themselves in the most competitive position in this area.

A firms' overall approach to customer service should be treated with the same vigour and passion as the performance of a breathtaking musical. Like The Lion King. Guys, those antelope don't just prance on stage opening night and perfectly pull off their split leaps in sync. Zazu doesn't just waltz into the spotlight and pull out hilarious one-liners from thin air. And no way does Mufasa just KNOW how to make me cry when he appears in the water to remind Simba that he is the true King. Those guys train, and practice, and train, and practice, and don't stop training and practicing right through to closing night.

You see what I'm getting at here. Amazing customer service doesn't just fall like manna from the heavens. Managers must set in place orchestrated procedures and programs to train their employees, and practice with them, and learn from mistakes, and continually strive to be better. It's a constant feedback loop, and an aspect of your firm which, depending on how important service is in your market, deserves a lot of your attention, time, and money.

A great and simple marketing model that explains what I've said much better is the Service-Profit Chain:

"...The service-profit chain, which links service firm profits with employee and customer satisfaction... consists of five links:
-   Internal service quality: superior employee selection and training, a quality work environment, and strong support for those dealing with customers, which results in...
-   Satisfied and productive service employees: more satisfied, loyal and hardworking employees, which results in...
-   Greater service value: more effective and efficient customer value creation and service delivery, which results in...
-   Satisfied and loyal customers: satisfied customers who remain loyal, repeat purchase, and refer other customers, which results in...
-   Healthy service profits and growth: superior service firm performance."

That's an excerpt from my first-year Intro to Marketing text book(1), and although it refers directly to service-based firms, it's a concept that should be taken up by anyone involved in management or ownership of a business. 

Company Culture

Lastly, a big part of that necessary infrastructure comes from company culture, which exists whether created purposefully or not. 

A positive, passionate and meaningful company culture is not only integral to sustained business growth, it also means greater productivity and longevity in what you get from your employees. This is another very obvious element that we still see even huge businesses like Woolworths in Australia, or Amazon in the U.S., fall short of today.

Big or small, company culture is vital to business growth and career-satisfaction amongst both employees and managers. Although simple in theory, the right company culture takes a lot of work and effort, and should not be ignored. If you're interested on where to start, here is an article on some companies with fantastic cultures, and how they've cultivated this.

Nothing that I've said here is groundbreaking stuff, and I wouldn't try to say it is. That's not the point of this article. The point is that we humans like to over-complicate things and forget that the basics need just as much attention as the more nuanced aspects of life and business... 

Just like flossing, these really-obvious-foundations-of-success can, in the day-to-day running of a business, quickly become the most-obvious-thing-that-we-keep-not-implementing.

So remember these three points, and remember that in an increasingly competitive and complex business landscape, bringing it all back to the basics is best.

Luck to ya!

(1) - https://www.helpscout.net/75-customer-service-facts-quotes-statistics/

(2) - Armstrong, Adam et. Al, 'Principles of Marketing', 6th Edition.